- NZD/USD fails to keep the recovery moves from 0.6405.
- China’s Industrial Production, Retail Sales came in below market consensus.
- The market’s risk-tone remains sluggish amid fears of the coronavirus (COVID-19) resurgence.
NZD/USD sellers return after China’s May month data dump flashed downbeat figures during early Monday. The kiwi pair currently drops to 0.6418, down 0.32% on a day, while carrying the initial fall backed by the broad risk aversion amid fears of the virus wave 2.0.
China’s May month Industrial Production slipped below 5.0% forecast to 4.4% whereas Retail Sales shrank more than 2.2% expected to -2.8%.
Read: China’s May data dump: Retail Sales, Industrial Production disappoint – Aussie keeps losses
Earlier during the day, New Zealand’s Food Price Index for May and Visitor Arrivals for April flashed downbeat figures, which in turn weigh over the upbeat outcomes of the Business NZ PSI for May.
It should, however, be noted that the major weakness of the quote could be attributed to the fresh fears of the pandemic’s resurgence. The latest news from Beijing suggests the return of the partial lockdown and cancellation of the State Council press conference. Additionally, the surge in the virus numbers from some states of the US and also from Tokyo adds to the market’s risk aversion.
As a result, the US 10-year Treasury yields drop 2.7 basis points (bps) to 0.672% whereas shares in Japan and the US stock futures also print negative marks by the press time. Even so, New Zealand’s NZX 50 seems to remain unaffected while flashing 0.50% gains to 331.55 as we write.
Although the Asian calendar seems running out of major data by now, virus updates could keep the Antipodeans’ traders busy. Following that, the US Empire State Manufacturing Index for June, expected -30 versus -48.5 prior, could add burden on the pair watchers.
Technical analysis
A sustained break of a one-month-old support line, around 0.6445/50 now, directs the pair again towards a 200-day SMA level of 0.6320. On the upside, a 10-day SMA level of 0.6466 acts as additional resistance.
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